Securitization a complete fraud

Securitization: Advanta and the Fiction of True-Sale

The Big Picture explains it very clearly…the key point is that  “because securitizations are off-balance sheet, banks can provide that support without holding capital against the activity, ostensibly because they can choose to put the risk to securitized investors if they wish to do so, which no going concern business will ever actually do. Hence, the saying on Wall Street is “the only securitization without recourse is the firm’s last.””

So securitizers have been providing an implicit backup that is not legally binding…caveat emptor.


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